N.Y.S.E IN MERGER TALKS Â |Â The owner of the New York Stock Exchange is in talks to be acquired by the IntercontinentalExchange, an upstart commodities and derivatives trading platform, in an $8 billion deal, people briefed on the matter tell DealBook's Michael J. de la Merced. IntercontinentalExchange, known as ICE, is expected to offer about $33 a share, with two-thirds of that in stock, according to one of these people. That would be a 37 percent premium to NYSE Euronext's closing price on Wednesday.
“While the New York Stock Exchange, with its opening bell and floor traders, has been the public image of a stock market for two centuries, it is NYSE Euronext's businesses in the over-the-counter trading of derivatives - including the Liffe market in London - that appear to be the main attraction in the merger talks,†Mr. de la Merced writes. A deal would follow a failed attempt by ICE and the Nasdaq OMX Group more than a year ago to buy NYSE Euronext - an effort that fell apart after being challenged by regulators. “The newest merger might pose fewer problems because ICE focuses on commodities like oil, natural gas and cotton, while NYSE Euronext plies mainly in stock and stock options and derivatives.†A merger, Mr. de la Merced says, would underscore “how the global market for derivatives has eclipsed that for stocks.â€
HOW UBS WAS DENIED LENIENCY  | UBS made history on Wednesday when its Japanese unit agreed to plead guilty to fraud over interest-rate manipulation. “It was the first guilty plea from a major financial institution since Drexel Burnham Lambert admitted to six counts of f raud in 1989,†DealBook's Ben Protess reports.
The Swiss bank fought to avoid its punishment, which also involves $1.5 billion in fines from an international group of regulators. Mr. Protess reports: “A week ago, in a bid for leniency over interest-rate manipulation, the bank's chairman traveled to Washington to plead his case to the Justice Department, according to people briefed on the matter. Knowing the long odds, the chairman, Axel Weber, asked the criminal division for a lighter punishment. But the government did not budge. With support from Attorney General Eric H. Holder Jr., the agency's criminal division decided the bank's actions were simply too egregious, people briefed on the matter said.â€
The Justice Department also leveled criminal charges at two former UBS traders. Tom Hayes and Roger Darin were charged with conspiracy to commit wire fraud, and Mr. Hayes also faces an additional count of wire fraud and another related to price fixing.
Just six months ago, it seemed UBS's penalty would be similar to the $450 million settlement struck with Barclays over attempts to manipulate Libor. “Then the tone shifted this fall. After examining thousands of e-mails and hours of taped phone calls, the agency's criminal division concluded that the conduct at the Japanese subsidiary warranted a criminal charge.†Prosecutors wanted to send a warning. Other institutions, including JPMorgan Chase, remain in regulators' sights.
ACKMAN'S NEW TARGET  | Shares of Herbalife began plummeting on Wednesday after reports that the hedge fund manager William A. Ackman was short-selling the company. According to CNBC, Mr. Ackman, of Pershing Square Capital Management, has said he considers the business to be a pyramid scheme. Herbalife's chief executive called that accusation “bogus.†But investors fled the stock, which fell 12 percent. Mr. Ackman is scheduled to announce his new thesis Thursday morning as the market opens, at an event in Manhattan sponsored by the Sohn Conference Foundation. He is also scheduled for a media tour, with appearances on CNBC at 12 p.m. and Bloomberg TV at 12:30 p.m. If Mr. Ackman is indeed taking aim at Herbalife, he would be the second prominent hedge fund manager this year to raise questions about the company. David Einhorn of Greenlight Capital, who has not announced any short position in Herbalife, prompted a selloff when he asked questions on a conference call in May.
FRESH SETBACK FOR PAULSON  | Some of John A. Paulson's investors appear to be reconsidering whether they should keep the ir money with the hedge fund manager, who has suffered a string of disappointing quarters. The latest doubts came from Morgan Stanley Smith Barney, which recommended that its financial advisers withdraw client money from Mr. Paulson's Advantage and Advantage Plus funds, according to Reuters, which cites an unidentified person familiar with the matter. “The move, which is expected to shave some $100 million in assets off the $5.7 billion Advantage and Advantage Plus funds, may be more humiliating than truly harmful for Paulson's $20 billion firm,†Reuters reports, adding that investors with Morgan Stanley “have already asked to pull out about $36 million of the $100 million that is expected to be redeemed.†In August, Citigroup's private bank was said to be with drawing $410 million from Mr. Paulson's funds.
Google to Sell Cable-Box Business for $2.35 Billion  | The Arris Group is buying Google's Motorola Home business for $2.35 billion.
BLOOMBERG NEWS
Emirates Bank to Buy BNP's Egyptian Assets  | The Dubai bank Emirates NBD said it would acquire the Egyptian assets of BNP Paribas in a roughly $500 million deal.
WALL STREET JOURNAL
$3.13 Billion Specialty Insurance Deal  | The Markel Corporation, a specialty insurer, on Wednesday said it had agreed to acquire a rival, Alterra Capital, for $3.13 billion.
DealBook '
Kodak to Sell Patents for $525 Million  | Eastman Kodak on Wednesday announced that it had successfully sold its sizable patent portfolio for $525 million to a consortium led by Intellectual Ventures and the RPX Corporation. Company officials have considered the sale a crucial step toward rebuilding the beleaguered company, Andrew Martin reports in The New York Times.
DealBook '
Chief of Martha Stewart Living to Resign  |Â
NEW YORK TIMES MEDIA DECODER
Morgan Stanley Makes Donation After Sandy Hook Massacre  | Morgan Stanley, where three employees lost family members in the Sandy Hook Elementary School shooting, has donated $150,000 to charities honoring the victims. In addition, about 1,400 employees have made pledges, contributing just over $1 million in tot al.
DealBook '
Bank of America Chief Said to Block Pay Cuts for Brokers  | Bloomberg News reports: “Bank of America Corp. Chief Executive Officer Brian T. Moynihan blocked a proposal to cut the main component of most brokers' pay for 2013, said a person with direct knowledge of the matter.â€
Aegon, Dutch Insurer, to Form Venture With Banco Santander  |Â
REUTERS
Scandal Grows Around Deutsche Bank  | The latest revelations are hurting the German firm's ability to rehabilitate its image, The Wall Street Journal notes.
WALL STREET JOURNAL
Fidelity's ‘Invisible Heir'  | Abigail Johnson, a 24-year veteran of Fidelity Investments with a net worth estimated at $10 billion, “has become the leading member of what today is still a very small club†of powerful women, Bloomberg Businessweek writes.
BLOOMBERG BUSINESSWEEK
Chinese Companies Head For the Exit  | The $3.7 billion bid to privatize Nasdaq-listed and Shanghai-based Focus Media, a leveraged buyout backed by private equity and management, is the biggest deal in a rising wave of Chinese companies seeking to delist from American exchanges.
DealBook '
Focus Media Agrees to $3.7 Billion Buyout  | The Chinese advertising company Focus Media, which is listed in the United States, agreed to a buyout offer from the Carlyle Group and other private equity funds.
FINANCIAL TIMES
K.K.R. in Deal to Collect Water Revenue  | On Thursday, K.K.R. “kicked off a joint venture with Suez Environment to run the water and wastewater systems of a New Jersey city it hopes will become a model for cash-strapped local authorities in the United States,†Reuters reports.
REUTERS
Hedge Fund Challenges Benckiser's Deal for Caribou  | Accretive Capital Partners, which has a 4 percent stake in Carib ou Coffee, “urged the company to pursue a better deal after it agreed to be sold to Germany's Benckiser group for $340 million, saying it is easily worth double that price,†Reuters reports.
REUTERS
Pecora Capital, Quantitative Hedge Fund, Opens Its Doors  | The new fund is trying to avoid the fate of similar funds, which have suffered losses this year, Reuters writes.
REUTERS
Brazilian Cement Producer Said to Plan $3 Billion I.P.O.  | Bloomberg News reports: “Votorantim Cimentos SA, the biggest cement producer in Brazil, is preparing an initial public equity offering of at least $3 billion, according to three people with direct knowledge of the matter.â€
BLOOMBERG NEWS
Pinnacle Foods Aims for $100 Million I.P.O. Â |Â The company is backed by the Blackstone Group.
DOW JONES
Start-Ups That H elp Companies Outsource Tasks  | “This season, dozens of start-ups are competing to take on your holiday headaches,†The New York Times writes.
Kleiner Partners Talk Clean Tech  | John Doerr of Kleiner Perkins Caufield & Byers told The Wall Street Journal: “We're very committed to green and the numbers are showing how that pays off.â€
WALL STREET JOURNAL
Ireland Passes Law to Bolster Housing  | The bill overhauls several aspects of Ireland's consumer debt laws, including a measure that would let stressed borrowers work with banks to write down the value of their mortgages.
DealBook '
Ally Repays Last of Debt Borrowed Under F.D.I.C. Guarantee  | Ally Financial, the former G.M.A.C., said Wednesday that it had repaid $4.5 billion in debt that was guaranteed by the Federal Deposit Insurance Corporation after the 2008 financial crisis.
DealBook '
L ast-Ditch Challenge to the Volcker Rule  | Simon Johnson writes on the Economix blog: “In a desperate attempt to prevent implementation of the Volcker Rule, representatives of megabanks are resorting to some last-minute scare tactics.â€
S.E.C. Moves Against Day-Trading Broker  | The Securities and Exchange Commission has revoked the license of a Canadian brokerage firm over failing to prevent overseas day traders that used its system from manipulating stocks in the United states.
DealBook '
France Out lines Plan to Reduce Banking Risk  | The banking bill unveiled on Wednesday “was a far cry†from the tough talk of the president, François Hollande, in January, The New York Times writes.
Looking Back on a Year of Bank Scandals  |Â
REUTERS
Municipalities Fight to Preserve Tax Exemption  | The New York Times reports that “local and state governments, bond dealers, insurers and underwriters†have mounted a lobbying campaign †œthat is trying to pre-empt any attempt to limit or even kill†a tax exemption on municipal bond interest.
NEW YORK TIMES
Bank of Japan Steps Up Monetary Easing  | Japan's central bank is expanding the size of its asset-purchase program.
